Piggybank entrepreneursGu Chang-wan paints a positive picture of his first business venture. “Even though I ended up going to court because of money I owed, it was fun to run my own company.” This is not the voice of a hardened pro, but a 13-year-old elementary school student. Going bankrupt can only be a “fun” thing to do at a camp for children.
This is not a kids’ camp for canoeing or swimming, however. It’s about surviving -- financially.
Held earlier this year at the Yongin campus of Hankuk University of Foreign Studies, the Children’s Economics Camp is one of a few similar programs in the beginning stages in Korea.
What drew Chang-wan to the camp was the chance to run a “real” business, rather than being bored sitting in a class and learning economic theory. As a member of a team, Chang-wan came up with his own currency unit, registered his business, took care of everything from manufacturing to public relations and sold his items in a virtual society.
After the three-day-long program, Chang-wan said he would begin saving every penny of his allowance, which pleased his mother, Seo Gyeong-ja. Ms. Seo said, “He used to grumble whenever I told him to be frugal, but now he sees the reason why.” Chang-wan said, “I learned for the first time in my life that you need know-how to manage a budget.” Chang-wan wants to introduce his friends to the camp, and wishes his school would come up with such a program.
Chang-wan’s hopes seem likely to come true within the foreseeable future. Financial education for teenagers is sweeping the nation. From the press to both public and private civic groups, numerous financial-related corporations are chipping in to foster the boom. Experts voice accord that 2003 will mark the first year that solid financial education programs for youth will start to emerge.
The Federation of Korean Industries stands at the forefront of this boom. The group promoted financial education as the year’s main policy and budgeted 1 billion won ($830,000) for its development. They came up with various programs for journalists, government officials and elementary school students, while putting an all-out effort into their programs for teenagers. The group supported the National Strategy Institute with a 1 billion won donation.
Another group, the Korea Chamber of Commerce & Industry, is also trying hard to keep abreast. The group formed a special task force dedicated to financial education, focusing on developing teaching materials and training professional instructors.
Private groups, like the strategy institute, are also making moves. The civic group, established in 1991, has steadily shown interest in financial education for teens. Last year, the institute decided that a program proven abroad might be the ticket, and signed a contract with Junior Achievement, the American civic group founded in 1919. More than 100 countries have modeled their programs after JA’s, and last October saw the establishment of Junior Achievement Korea, in concert with its American counterpart.
Movement is also afoot by a corporate entity, the oddly-named Beautiful Teenagers Community. An Seung-hwan, the leader of the group, last year successfully launched Bizcool, short for business school, where teenagers can experience starting and running a business. This year, Mr. An’s vision gathered more momentum with the opening of a Korean branch of another American financial education group called DECA, for Distributive Education Clubs of America. Mr. An is now working on EduFund to support camps and model schools that will provide yet another opportunity for teenagers who want to run businesses in the real world.
Banks and credit card companies are getting themselves ready, too. They see financial education as a way to amass potential customers in the future. On top of this, educating young people about the benefits as well as dangers of credit could improve the public image of credit cards, which took a turn for the worse through an over-issuance of credit cards as well as the distribution of a slew of insolvent loans. Finally, credit card companies hope that education will reduce the number of individual bankruptcies, which hurt business all around.
The Presidential Commission on Small and Medium Enterprises, which is under the direct control of President Roh Moo-hyun, raised 1 billion won this year for financial education. The commission is dedicated to training business high school students. Last year, the group took the initiative in the form of the Bizcool program and this year is ready to expand its budget, tentatively to four times its current size.
Financial experts see obvious reasons for this trend. A change in Korea’s economic paradigm is cited as the main reason. Cheon Seung-gyu, a researcher at the Korea Development Institute, says, “In our current world, with no limit on competition, the old-fashioned way of financial education has no place.” Kim In-suk, a researcher at the state-run Consumer Protection Board, says, “It's actually late for the financial education boom, but better than never.”
Also under consideration is the growing number of individual bankruptcies. Koreans used to be free from such problems, but recently they are becoming less and less the exception. Kim Jae-won, leader of the Financial Education Club, says, “Out of 2.6 million credit delinquents in the nation, more than 450,000 are in their 20s. Something is obviously wrong with our financial education.”
Most experts in the field welcome this boom, but not all are approaching it comfortably. Problems cited include the fact that, currently, there are no professionals solely dedicated to financial education programs. Amateurism is rampant at the moment, they say. “Financial experts have a tendency to take the education part as ‘dirty work,’ while those who are interested lack experience in teaching teenagers,” says Mr. Cheon at the Korea Development Institute.
Kim Seong-ryeong, who attends a business high school, agrees. She recently participated in a financial camp for teenagers held by the Presidential Commission on Small and Medium Enterprises. While she liked much of the program, overall it did not meet her high expectations. Yun Mi-gyeong, a teacher at Seonhwa Girls’ Business High School, said, “Such programs are in their early stages, thus lack expert teachers and materials.”
But such programs are bound to succeed. “Despite many difficulties, this cannot be better timing for financial education,” says Seol Seung-hyun, a member of the Consumer Protection Board. Still, those hoping for solid, reliable programs in place must wait. As a member of the Federation of Korean Industries says, “It will take time for these programs to root themselves into Korean soil.”
1997-1998 financial crisis survivor: ‘Do as I say, not as I did'
“Economic education has become my lifelong business,” says Kang Kyung-shik, chairman of the board at the National Strategy Institute. Mr. Kang was once one of the prime offenders in the economic crisis that hit Korea in the late 1990s, as a former deputy prime minister and minister of finance and economy. Now he’s working on his second life, bringing financial education to teenagers.
Mr. Kang took the initiative to start a division of Junior Achievement in Korea. The Junior Achievement program was, to him, a good fertilizer for the then-barren soil of the Korean economy. Before starting the program, he put in considerable effort, talking to Korean youth and visiting New York University’s Junior Achievement branch to see how it works in the United States.
“I have a long way to go,” Mr. Kang says. But his dream is coming true. Already students at Yeomri Elementary School in Seoul, will have their own Junior Achievement program, and if Mr. Kang's plan works out, there should be 10 schools involved by year’s end.
As he sees it, education can prevent youth from going through the crisis his generation had to endure. “In this sense, financial education can lead to happiness.”
by Special Reporting Team
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